Apprenticeship Levy 2017-18

The Government’s plans to change the way that apprenticeships are funded come into force in April 2017. Employers may be required to pay contributions to the new apprenticeship levy and there will also be changes to the way apprenticeship training is funded for all employers.

If you are a small, medium or frankly pretty large company the apprenticeship levy probably won’t affect you too much. The levy requires that all employers who are operating in the UK with a wage bill that tops £3 million per year will have to invest in apprenticeships.

If you are an employer with a wage bill that exceeds £3 million you will be required from 6th April 2017 to pay 0.5% of your total wage bill on the apprenticeship levy. There will be a £15,000 levy allowance which will work much in the same way as the employment allowance where you claim £15,000 back from HMRC when you submit your PAYE.

Funds for companies taking on an apprentice will be accessed through a new digital apprenticeship service account and will appear in the employer’s account monthly. These funds will expire after 18 months if they are not spent on apprenticeship training.

When you have agreed a price with a provider the payments will be made monthly for the first year of the levy. Employers who do not pay into the levy will also have access to the digital apprenticeship service to help them choose a training provider.

Once a company has received funds from the digital apprenticeship service, they will remain in the employer’s digital account and can only be used towards the cost of the apprenticeship which must be with an approved training provider and assessment organisation. The funds cannot be spent on associated costs such as wages, travel and traineeships.

For a full understanding of how the new legislation may or may not affect you please refer to the following article CLICK HERE